Bershidsky's View From Europe

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website
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Here's today's look at some of the top stories on markets and politics in Europe.

G20 to move for tax transparency.

The leaders of the G20 nations meeting in St. Petersburg are unlikely to forge a consensus on Syria, but they will probably agree on a plan to move toward the automatic exchange of tax information among countries and to eliminate international corporate tax loopholes. The Dutch government, which is only represented in the G20 as part of the EU, has already offered to negotiate loose tax treaties with developing nations. This move follows a recent Switzerland-U.S. accord allowing Swiss banks to come clean about U.S. tax evaders and not face prosecution, as well as anultimatum by the Swiss-based bank UBS to its French and German clients to comply with their countries tax laws. Fighting tax evasion is an obvious common ground for the world's biggest economies, developed and emerging alike. No doubt they'll focus on this agenda with all the more fervor, given the depth of their differences over Syria.

EU attacks "shadow banking."

The European Commission unveiled a proposal that would set curbs on money market funds similar to those on banks. Going against France and Germany's demands, Michel Barnier, the EU commissioner responsible for financial regulation refused to ban fixed-value funds that offer a guaranteed share value to investors. Instead, his proposal requires these funds to build up 3 percent capital cushions to provide a measure of safety in case of an investor run. Brussels has also suggested rigid limits on the types of instruments in which the money market funds can invest. The European fund industry manages $2.9 trillion, making it potentially dangerous to the continent's economic health in case of a 2008-like crisis. Banks use the funds to conduct unregulated off-balance-sheet business. It stands to reason that they should face the same safety requirements here as in officially recognized banking.

Slovenia may need a bankrescue.

According to Erik Berglof, chief economist of the European Bank for Reconstruction and Development, Slovenia may be the next European nation to require a bank bailout. Its banks hold almost $10 billion in bad debts, about 20 percent of the country's gross domestic product. So far, the Slovenian government has avoided asking the International Monetary Fund or the EU for aid, because it can still borrow on financial markets: In May, Slovenia placed a $4.6 billion bond issue. The country is also hoping to raise cash through a large-scale privatization program. Even if Slovenia succeeds, European banking woes are far from over. While Spain, Cyprus and nationalized banks elsewhere drew all the attention, some of the quieter havens accumulated problems of their own. Slovenia is a case in point.

App market created 800,000 jobs in Europe.

A study released in Brussels estimated that the "app economy", or the market for smartphone and tablet applications, has created almost 800,000 jobs in the European Union in just five years. The EU accounts for 22 percent of global app sales, or $13 billion in revenue. The application developers are mainly young people working alone or in small companies, so much of the industry is below the radars of financial markets and the media. The sheer size of the market, however, warrants the EU nations' attention. The governments could be helpful primarily in improving access to public databases, which could be "wrapped" into handy apps.

French unemployment sets new record.

Unemployment in France rose 0.1 percentage point in the second quarter of 2013 to 10.5 percent, the highest level since 1998, according to the official statistics office, INSEE. The country now has more than 3 million people unemployed. The growth in the number of jobless has slowed, and the French government has managed to drive down youth unemployment from 25.5 percent at the end of 2012 to 24.6 percent. Yet generally, France's moderate economic growth and the socialist government's efforts at social justice have done little to improve the employment situation. The government now realizes that it has gone overboard raising taxes, but next year taxes on businesses are about to increase again - by about $2.6 billion, according to the latest proposals. That means that even if the economy keeps growing, companies will remain reluctant to create jobs.

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